Disability Insurance

SSR 67-28: SECTION 228(c)(1) and (h)(2). -- SPECIAL AGE 72 PAYMENTS
FOR UNINSURED INDIVIDUALS -- REDUCTION BECAUSE OF ELIGIBILITY FOR
GOVERNMENTAL PENSION

SSR 67-28

Where an individual is receiving disability retired pay as a veteran
under Chapter 61, Title 10 of the United States Code (rather than
compensation under the laws administered by the Veterans' Administration),
held, he is thus eligible for a "periodic benefit under a
governmental pension system" within the meaning of section 228(c)(1) of
the Social Security Act, as amended, and any benefit to which he may be
entitled under the special age 72 provisions of section 228 of the Act
must be reduced by the amount of such disability retired pay.

Public Law 89-368, enacted March 15, 1966, added section 228 to the
Social Security Act which provides, effective October 1966, monthly
payments of $35 to certain persons who are not insured under the regular
or the transitional insured status provisions of the Act and who reach age
72 before 1968, or who have at least 3 quarters of coverage, earned at any
time, for each calendar year after 1966 and before the year in which age
72 is attained.

Advise has been requested as to whether disability retired pay received
under Chapter 61, Title 10 of the United States Code, by a veteran of the
United States Armed Forces is a "periodic benefit under a governmental
pension system" within the meaning of section 228(c)(1) and section
228(h)(2) of the Social Security Act.

Section 228(c)(1) of the Act provides as follows:

The benefit amount of any individual under this section for any month
shall be reduced (but not below zero) by the amount of any periodic
benefit under a governmental pension system for which he is eligible for
such month.

The term "governmental pension system" as defined in section 228(h)(2) of
the Act means:

* * * the insurance system established by this title or any other system
or fund established by the United States, a State, any political
subdivision of a State, or any wholly owned instrumentality of any one or
more of the foregoing which provides for payment of (A) pensions, (B)
retirement or retired pay, or (C) annuities or similar amounts payable on
account of personal services performed by any individual (not
including any payment under any workmen's compensation law or any
payment by the Veterans' Administration as compensation for
service-connected disability or death). (Emphasis supplied.)

If disability retired pay received under Chapter 61, Title 10 of the
United States Code is a "periodic benefit under a governmental pension
system" within the meaning of the Act, then, in accordance with the
provisions of section 228(c) of the Act, the amount of the special age 72
payment to which a veteran is entitled for any month under section 228(a)
of the Act must be reduced by the amount of the disability retired pay for
which he is eligible for that month. It is true that section 3105 of Title
38, United States Code, provides that a veteran has the right to waive
disability retired pay for which he is eligible in favor of a pension or
compensation under the laws administered by the Veterans' Administration.
The mere existence of the right by a veteran to waive the disability
retired pay under Chapter 61, Title 10 of the U.S. Code in favor of a
payment from the Veterans' Administration does not, however, bring the
payment within the exclusion of section 228(h)(2)(C). The exclusion
specifically relates to a payment by the Veterans' Administration. (If the
option is exercised, and the payment from the Veterans' Administration is
based on a service-connected disability, the amount received from the
Veterans' Administration would fall within the exclusion.)

Accordingly, it is held that disability retired pay for which a
veteran is eligible under Chapter 61, Title 10 of the United States Code,
is a "periodic benefit under a governmental pension system" within the
meaning of section 228(c)(1) and section 228(h)(2) and will result in a
reduction of any special age 72 payment to which the veteran is entitled
under section 228 of the Social Security Act.

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